Circular regulating lending in foreign currency to resident borrowers in Vietnam

By Circular No.29/2013/TT-NHNN, State Bank of Vietnam regulating lending in foreign currency by credit institution, foreign bank branches (CIs) authorized to conduct foreign exchange activities to borrower being residents.

Circular regulating lending in foreign currency to resident borrowers in Vietnam

 1. CIs shall be entitled to consider deciding in foreign currency lending for following capital requirements:

 a. Short-term, medium-term and long-term loans in order to make offshore payment for the import of goods and services when the borrower will have sufficient foreign currency revenue from production and business revenue to repay the loan.

 b. Short-term loans to primary [or focal] petroleum import enterprises allocated by the Ministry of Industry and Trade with a year 2014 petroleum import quota and which need a foreign currency loan to make offshore payment for such import, when the borrower does not have sufficient foreign currency from production and business revenue to repay the loan. This provision shall be implemented until the end of 31 December 2014.

 c. Short-term loans to meet domestic capital requirements to implement production and business plans for export of goods via Vietnamese bordergates when the borrower will have sufficient foreign currency revenue from export to repay the loan; when the lending bank disburses loan monies, the borrower must sell by way of a spot transaction such amount to the lender, except where the capital requirement of the borrower is in order to make a payment transaction which the law stipulates must be made in a foreign currency. This provision shall be implemented until the end of 31 December 2014.

 d. Loans for direct offshore investment in projects or works of national importance where the investment policy has been approved by the National Assembly, Government or Prime Minister and for which the Ministry of Planning and Investment has issued an offshore investment certificate.

 2. CIs are permitted to assess and decide to make foreign currency loans outside those stipulated in clause 1 above, in priority sectors [and] sectors in which development of production and business is encouraged by the Government after the State Bank provides written consent in accordance with the sequence and procedures prescribed in article 4 of the Circular.

 3. CIs wishing to provide a foreign currency loan as stipulated in clause 2 above shall send a written request to the State Bank for consent. SBV will answer within 30 days upon receipt the application.

 4. CIs shall send monthly report to SBV in standard form    

  5. Effective
 - This Circular is of full force and effect as from 1 January 2014 and replaces Circular 37/2012/TT-NHNN of the SBV dated 28 Dec 2012 on lending in foreign currency by credit institutions and foreign bank branches to resident borrowers.

 In the case of loan contracts signed before the effective date of this Circular for lending by the method of a loan on each occasion, a loan in accordance with an investment project or a syndicated loan, then the lending bank and its client shall implement the contents of such loan contract consistent with the law effective at the time of signing such contract, or shall amend the loan contract for consistency with this Circular. In the case of lending pursuant to a credit facility or a revolving loan pursuant to a loan contract signed before the effective date of this Circular and drawndown on or after 1 January 2014, the lending bank and the borrower shall implement same in accordance with the provisions of this Circular.

 In general, there is no new change in this Circular compared with previous provisions.

 Lawyervn.net